Task 1: The analysis of the marketing environment
Task 1: The analysis of the marketing environment?
Task 2: The marketing plan?
Task 3: Future growth options?
Bookie Joint will be opened as a sole proprietorship business opportunity in the busy university proximity of Trafalgar Square, UK. The new bookstore will target the students of the nearby university along with the local residents of the Trafalgar Square. The owner of Bookie Joint plans to take the help of the local library staffs and e-resources in order to segment the overall target population. The estimated start-up expense will be around £ 12500. The assignment will evaluate the marketing plan for Bookie Joint and will analyse the external environment and internal strengths and weaknesses of the new store. Further, the analysis of the target market and SMART objectives will help the marketer to formulate the plan effectively.
The political conditions of UK will affect the buying behavior of the consumers (Warner, 2010). The political stability of the place will affect the economy as well as affect the buying power of the individuals. Government policy and taxation also influence the business. The rise in corporate tax will result in increase in price of the books as a result; affect the business (Jensen, 2013).
The book store will need workers for functioning properly. The store can employ individuals who are either jobless or looking for a job to support their education (Roy, 2009). Students will be perfect for in-store job in the book store, which will help them to increase their knowledge while handling customers in the store. In this way, the store can help in improving the economic conditions of the society (Jensen, 2013).
Adhering to the social responsibilities is one of the most important factors while opening a store. The book store should comply with the rules of the local business association of that location (Kahn and Kahn, 2010). They might ask for funds at various occasions, or general meeting, the owner of the store should cooperate with the association. Also it is social responsibility of the owner to attend the general meeting of the association regularly (Horton, 2010).
The book store should be equipped with internet connection. Nowadays, life is unimaginable without technology. Access of the e-books and audio books in the store will help the customers, specially the students to access them from the store (Kahn and Kahn, 2010). Connection of the store with the web will help them to download the materials and incorporating the technology of print no demand will enhance the business of the store. In addition to these, incorporating Electronic Point of Sale, Electronic Fund Transfer System will help the owner to maintain the stocks more efficiently. Maintaining the database of all the books available also will help the users to find the books in the respective sections (Fine, 2009).
Not only bookstore but before starting any new store in an area, the individual should look into the legal issues of the location where the store will open (Roy, 2009). The individual should ask for proper documentation from the proprietor and should also check whether the location has any past legal issues that can pose as threat in present. Under Consumer Law of UK, the bookstore is bound to provide correct information to the consumers by providing correct description of products and proper pricing (Fine, 2009).
Wastage always comes complimentary when it comes to operating a store. The book store should keep in mind the environmental factors before starting the business. The waste products will be in the form of cartons and packages used for the delivery of the books. The owner should monitor the ways of disposing the packages so that the packages do not pollute the location (Horton, 2010).
Building a book café rather than building a normal book store will act as a great strength for the book store owner. Buyers will prefer to go through the books before buying them; hence if a café is available with the store, the buyers can sit there to consult the books (Crisan, 2011). Employment of students as workers in the store will make the store more informative for the consumers. In this way, the store will contribute to decrease the unemployment rate, the buyers; especially the students will be benefitted from the student workers while buying the books on any particular subject (Ramachandra, Chandrashekara and Shivakumar, 2010). At times, there are consumers who support a smaller bookstore than a larger one, the psychology behind this attitude is, the consumers believe that the price of the books will be less in local book stores than bigger ones. In addition to this, the same psychology works in case of the students. The students even prefer local book stores which will be near to the house, and will be easy to reach whenever needed (Ahmad, 2013).
The climate change along with the issues of global warming is making the consumers avail for more technological products. Saving paper is one of the top-most priorities for environmentalists (Ramachandra, Chandrashekara and Shivakumar, 2010). In such a situation, the demand for physical books is decreasing at a fast rate. Book stores at times are unable to meet the demand of the consumers due to lower availability of space (Crisan, 2011). The proprietors prefer giving the space to such business owners who will gain more profit. As books do not have a steady business, the proprietors fear of not getting the rent in proper time. As far as educational books are concerned, the rate of sale will decrease during summer or winter vacations as the studying practice of the students also fall (Ahmad, 2013).
Books will always be a favorite thing for book-lovers. For book-lovers buying a book will always be a priority rather than borrowing and returning a book (Koopman, 2012). Inviting local authors at the store and organizing small lectures along with book signing can give the store an opportunity to promote the store. Local authors will also get an opportunity to showcase the talents; hence will be frequent visitors in the store (Bertelsen, 2012).
The online sites selling books provide the consumers with discounted price for books are major threats to a book store. Generally, a book store can afford to give the customers a discount of 10% maximum (Koopman, 2012). The online sites provide various offers in bulk buying as well as heavy discount on all books. Libraries can also pose as a threat to the book store. Unlike a store, an individual can borrow a book of choice rather than buying it (Bertelsen, 2012).
Threat of substitute products is the most important threat when it comes to bookstore. Due to the advent of technology, e-books and audio books are sought after products for readers; hence the footfall of the readers will also decrease (Pereira, 2013). The proprietor will prefer giving out the space to other business owners with sure and steady revenue, for example, grocery, beauty products, medicine which will never lose its hold in the market. In addition to these, nowadays children is more attracted to video game parlors, junk food centers, etc than spending time on books, hence all these substitute products affect the business of books as a whole (Cateora, Gilly and Graham, 2013).
Book stores with big name and history will pose a serious threat to local bookstores. Intensity of the competitive rivalry will be very high. Some famous bookstores like, The London Review Book Shop, The Big Green Bookshop, Gay’s The Word, Waterston’s, P & G Wells are some of the names worth mentioning (Tiringer and Harrach, 2014). The already flourished business of these bookshops will allow minimal space to the new local bookshops. Whenever it comes to books, the customers will prefer bigger area with more options to choose from. The big stores will be able to meet the customer demands more than the local stores. Moreover, everybody will prefer a place with more space to move around to consult books than local stores, where the main problem is lesser availability of space (Cateora, Gilly and Graham, 2013).
The bargaining power of the consumers will relatively be less in bookstores. Whole sellers in book industry faces the challenge of bargaining power of the consumers but customers do not tend to bargain in a book store (Pereira, 2013). Though the book store may face bargaining from the students due to their economic constraints, but normal buyers generally do not tend to bargain in a store. If the store is located in a posh area, then the store will face minimum bargaining from the buyers, as the customers will be from a well to do background who will not be interested in indulging in bargaining (Choudhary, 2009).
Task 2: The marketing plan
In a situation where the bookstore is already being fighting for existence, a new entrant in the same business wills against the business. The intensity of competition from a new entrant in the business will be very high for the bookstore. The new entrant will also fight for existence. Provided that the entrant starts functioning with greater funds and capital, then the other owner will leave no stone unturned to make the presence felt in the market. The new entrant will make use of all the available resources in the market to attract the buyers, hence will intensify the competition for the already existing bookstores (Choudhary, 2009).
When on one hand, the bargaining power of consumers will comparatively be low in case of the bookstore; bargaining power of the suppliers will comparatively be very high for bookstores. Provided that there is only one whole seller of books in the area, the whole seller will take the advantage of the situation, as a result will tend to increase the price of the books to which the store will not be left with any other option but to comply with the whole seller (Tiringer and Harrach, 2014). The same situation may arise from another whole seller with good resources. When that whole seller is able to fulfill all the orders from the owner of the book store, in addition to that is providing timely delivery, the seller will take advantage of this situation, hence will intensify the bargaining power.
According to Barrow, Barrow and Brown, (2012) setting of the SMART objectives (Specific, measurable, attainable, realistic and timely) helps the marketer to successfully evaluate the objectives that the marketer feel is necessary to be attained in the end. In the present context, the marketer has framed the following SMART objectives for the new bookstore.
- The marketer plans to increase the sales of the bookstore by around 5% within the next 6 months
- The plan of the marketer is to introduce e-book facility, which will further help the marketer to increase the profit by around 2% quarterly
- The marketer further plans to open another book store in the Urban location of UK near the universities so that the new book store will be able to attract more students
- Apart from the books, the marketer also plans to introduce the some of the ancilliary products and services like internet cafe services, LAN gaming services, E-magazines and journal and a refreshment cafeteria
The STP analysis helps the marketer to understand the target customers for which the marketing plan is required to be prepared. Bowman, (2008) stated that opening of a bookstore is a risky proposition especially in case high competitions from the online book stores and the availability of the e-book facilities. Thus, the marketer in this respect will frame the STP analysis for the bookstore.
The UK book market is facing a decline in the growth from 2012 since the introduction of the online book purchase portals like Amazon, e-bay and after the introduction of the e-book reading services provided by Google and other search engines, the major focus of the students shifted from virtual book store purchase to the online services. The bookstore industry sale rose only 3.6 % in the year 2012. Moreover, the economic crisis decreased the purchasing power of the customers and thus they switched over to the online book services rather than purchasing the book at high price forms the bookstores.
Task 3: Future growth options
The marketer in this case has planned to segment the overall UK market based on the purchasing power of the customers of UK. Based on the segmentation strategy, the marketer plans to open the bookstore in Trafalgar Square area near the universities like London School of Economics, University of London, Kings College and Imperial College. The market segmentation shows that the total population of the Trafalgar Square is more than 1, 00,000 which comprises the total target segment for the Bookstore. The majority of the houses hold income of the residing citizens of the Square is around £ 30,000. However, the major focus of the marketer in this respect will be on attracting the students of the nearby universities and schools for purchasing of the books from the newly opened store (Bruyant-Langer, 2013).
The marketer in this respect will target three specific target customers among the target segment. The three major target customers for the bookstore are selected as below:
Causal purchasers: Chambers and Humble, (2012) stated that casual shoppers are the individuals who generally visit the bookstore with no particular intention of purchasing any specific item. In such case, this group of customers generally purchases the attractive items. This group of customers range within the age group of 9 to 18 years including male and female both categories of students. Keeping, the interests of this group of customers, the marketer will focus on storing the front rows of the bookstore with attractive stationery items (Crayons, playbooks). The marketer will also arrange for merchandises like game players, game CDs and drawing books for the casual group of purchasers.
However, Finch, (2013) stated that this group of customers are genially the impulse buyer hence they may often leave the store without purchasing anything or may prefer to opt for low priced items. For this reason, the marketer of the new book store will also equip the store inventories with the low priced books including journals, business magazines, creative idea books, cooking books and information documentaries which will attract the customers and will also help to increase the sales.
Hard to find purchasers: These are the group of customers who have specific needs and generally visit the store to make purchases of some pre-listed book items. In terms of the high competition from the persisting book stores like the London Review Book shop, Big Green Bookshop and P&G Wells, the new book shop will have to make a competitive advantage in terms of the core products so that this target segment of customers can be attracted and retained. These segments of customers range between the age group of 20 to 50 years and covers the majority of the target population. For this category of target population, the marketer will effectively include the old edition books, which are rarely available in new bookstores. The marketer can also list out the priced collections from the e-library and make the paperback version available within the store, which would make the core product of the store different and attractive compared to the other new bookstores operating in Trafalgar Square (McKeever, 2012).
Specific category purchasers : These are the categories of customers who generally purchase the books of one specific category without diverting to purchase of any other category of books. Friedlander, (2013) stated that this group of customers generally have the complete idea about the type of purchase they intend to make and generally represents the highest volume of purchaser in a particular store. The age range of this group of customers range from 18 to 30 years and depending on that, the marketer will stock the rest of the store. The marketer for this segment of customers will include the separate segments of book rows like romance segment, fiction segment, educational segment, management segment, political segment, technical segment and non-fictional segment.
The very widely used ‘marketing mix’ is actually a tool devised for designing strategic marketing tool. Traditionally, the factors of Product, Place, Price, and Promotion were considered as the core decisive factors of any business, and were popularly known as the 4Ps of Business. This particular model was considered as the most exhaustively utilized marketing model, as reported by surveys carried out by various business magazines.
The primary model of 4P’s as devised at a time when most of the business were involved with the selling of finished goods and/ or products: the concept of selling of services was at that point of time no known in the business domain. Likewise, the concepts of providing after sales services to the customers of the business, and the strategy of developing a brand name through the provision of such services to the customers were yet to be introduced in the market. Hence the only factors that were to be considered in the marketing strategy for any business consisted of the products being sold by the business, its location, the pricing strategies used by te business and the promotion strategies used by the business (Rimm, 2012).
Over time, three more factors, namely the participants (later on renamed as People), the physical evidence and the processes used by any business corporation were included in the model. In 1960, E. Jerome McCarthy devised the 7Ps model that is being widely used by organizations today and published it in the book titled as Basic Marketing. A Managerial Approach.
The Bookie Joint should use the 7 P’s model to evaluate the business model being followed, and emphasize on the following sectors of their business:
Products/ services: At present, the organization sells hard copies of text books and/ or other materials at their physical stores. However, the customers can also access the official website of the book store to order boos. The book store provides additional discounts on those which have been order through their website and books are delivered to addresses provided by the customers, without any additional cost. The organization even plans to make e-books available to their customers through their website in near future (Romero, 2011).
Prices/Fees: As the book store has been opened recently, the management has decided to adapt a strategy of competitive pricing in order to draw the attention of the customers. Books are being made available to the customers at reduced prices and special promotional offers are being made to those customers who use the official website to order books. For the time being, books are also being delivered to the customers at their doorsteps without any additional fees.
Place/Access: Setting up the physical stores within the university premises was one conscious decision adopted by the management. Needless to say, the strategic location of the bookstore will attract a wide range of new customers, including the students of the university, and the faculty and the professors associated with the institute.
Promotion: The bookstore is providing various promotional offers available to those customers who order books from their official website. Along with this, the book store is promoting its brand name on various social media sites that are popular among students, besides conducting promotional marketing by the traditional approaches like distributing pamphlets and leaflets, putting up flexes and hoardings, as so on. The management has also decided to sponsor certain events being conducted by the students of the university as part of their marketing strategy.
Physical Evidence: The book store has been set up within the university premises, and has an impressive ambience. The staffs are well trained and provide much help to the customers while they search specific items. The book store has an official website through which their customers are able to order books online, without visiting the physical book store (Skinner, 2012).
People: The book store has employed a group of highly skilled staffs, and provides necessary training to them such that they are able to help he customers. The organization has employed a group of employees who are specialized at providing after sales services to the customers: these employees are assigned with the task of meeting up the grievances of the customers and to provide solutions to any problem experienced by them.
Partners: The book store has business collaborations with most of the well known publishing houses. Their direct business relations with the publishers allow them to make books available to the customers at competitive prices. The book store also has a section of used books: the book store buys such books, at low prices, from the students of the institute and makes them available to the customers at discounted rates.
The evaluation of the macro and microenvironment of the new bookstore shows that high competition is present within the book industry of UK. The major threat of the book industry is from the substitute products and services like the e book, online book purchase and from the presence of the large number of physical bookstores in UK. Keeping the high degree of competition in mind the marketer and the owner of Bookie Joint has formulated the following future strategies for the bookstore (Stutely, 2012).
Introduction of ancillary products: The bookstore will display other products than the core products that are the books in the coming years. Keeping in mind the needs of the casual shoppers’, the owner of the bookstore will include accessory items like the gaming CDs, gaming books, storybooks, Movie DVDs, comics, stationery items and other options.
Introduction of a cafe: In the initial stages, the owner will maintain a low profile in terms of the new store, however, in the later stages the expansion policy will also include setting up of a reading cafeteria within the store or as a part of the store with a kiosk approach. This will make the reading environment for the customers comfortable and the store will be able to attract large number of customers. The cafeteria will also provide snacks, refreshment, and sitting opportunities for around 20 customers along with reading lights within the shop.
Introduction of low priced books: The owner of Bookie Joint will also introduce a separate low price segment of books for the casual customer segment that generally prefer to purchase books which are of low price with no actual need for the product. For availing this strategy, the Bookie store will include second hand paperback editions of some of the most popular books in all specific ranges, which are generally in high demand (Skinner, 2012).
In term of assessment of the overall marketing plan, the focus of the owner should be on the attainment of the SMART objectives. The owner of Bookie Joint will analyse the financial reports and the profit growth level of the book store in every quarter so that the owner can track the changes in the growth rate and the changes in the sales percentage. The measurement of the monthly customer footfall can also be measured along with a customer loyalty card that the store can offer to the first time visitors (Stutely, 2012).
The major focus of the marketing plan is on the assessment of the relevancy of opening a new bookstore in an urban location of UK. The macro assessment shows that it is profitable to open a new bookstore in UK since the number of universities and the number of students is high in UK. Moreover, the target segment analysis shows that it is advisable that the physical store should be opened in Trafalgar Square near the universities and the students should be targeted with the introduction of low priced books along with paperbacks and other accessories.
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